Check out these 5 emerging trends in finance management that will helps build a more efficient workforce that worth paying attention to
Business schools teach financial management to management graduates, which includes aspects such as strategic planning, organizing, directing, and controlling of financial undertakings in an organization.
Management graduates also learn how to apply management principles to financial aspects of a business and key aspects related to critical financial decisions. Some fundamental concepts taught include capital budgeting, capital structure, and working capital management.
Graduates who enter the finance workforce provide critical input to the organization in investment decisions, financing decisions, and dividend policy decisions. One of the primary roles of a financial management team in large organizations is to maximize shareholder wealth, i.e. to ensure that shareholders earn the most wealth for their investment.
There are a few emerging trends in finance management that management graduates must learn in order to remain relevant and efficient in the workforce of the future.
1. Digital transition
Financial management is seeing a massive and ongoing focus on digitization and the adoption of new and emerging technologies to improve operational efficiencies and provide superior customer experiences.
The application of artificial intelligence, big data analytics, and machine learning to finance is transforming the financial management domain. There are tools, technologies, and platforms dedicated to financial management, and having hands-on experience will be extremely valuable to the next generation workforce.
McKinsey has identified four digital technologies that are reshaping finance management: automation and robotics, which aid in process improvement; Data visualization, which provides end users with real-time, simple financial information; basic analytics, which aids in efficient decision support; and advanced analytics, which can assist businesses in uncovering hidden shareholder value and growth opportunities
2. Finance and money in the digital age
Digital finance and digital money are the next financial management trends (DFDM). DFDM encompasses a wide range of new financial products, financial businesses, finance-related software, and new forms of customer communication and interaction, all delivered by FinTech firms and innovative financial service providers.
Many banks and traditional insurance companies are now facing competition from ‘FinTech’ companies, which launch new products and services almost every month.The next generation of financial managers must learn new ways to reach and engage with technologically savvy clients, as well as have a solid understanding of DFDM.
3. Bitcoin – the next big thing
Knowledge of cryptocurrency – a digital or virtual currency secured by cryptography, making it nearly impossible to counterfeit or double-spend – is also required for the future workforce.
Knowledge of cryptocurrencies — decentralized networks based on blockchain technology with a distributed ledger enforced by a disparate network of computers — is expected of the next generation workforce entering the financial management domain.
4. Emphasize the user experience
Human-centered design has become increasingly important in recent years. Banks are now aware that creating usable interfaces for banking service delivery is not enough; the experience provided to customers at every touch point of digital interaction is critical.
These developments are reshaping the financial services industry. Banks and other financial industry brands can increase their market share and customer retention by creating personalized experiences for their customers.
As a result, all aspects of improving user experience are “necessary” for someone entering the financial management field.
5. New dangers and challenges
Finance professionals will face a plethora of new risks as a result of technology, the most serious of which may be external security risks. Hence, they must be aware and must constantly update themselves about the risks and challenges thrown by ‘Fintech’ implementations.
With technology playing such an important role in financial management, new risks and challenges are becoming more common. Regulatory bodies are constantly developing new regulations to address and mitigate risks.
New legal regulations enacted by the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), the Insurance Regulatory and Development Authority of India (IRDAI), the Pension Fund Regulatory and Development Authority (PFRDA), and others must be studied, and finance management professionals must be preparedto be updated, as well as adapt to a variety of new regulations as they emerge over time.